Spain's renewables surplus and the Iberian export problem in 2026

The capacity baseline: Spain crosses 64 GW of solar plus wind #

Spain finished 2024 with roughly 32.0 GW of installed solar PV and 31.7 GW of installed wind on the peninsular system, per Red Electrica de Espana (REE) annual statistics published in February 2025. Solar PV crossed wind for the first time in installed capacity terms during 2024, with utility scale plants in Castilla La Mancha, Extremadura, and Andalusia accounting for the bulk of new commissioning, and the rooftop self consumption fleet adding roughly 7 GW cumulative through end 2024 according to UNEF (Union Espanola Fotovoltaica).

Wind generation supplied roughly 23 percent of Spain's 2024 electricity, solar PV 17 percent, hydro 13 percent, and nuclear 20 percent, with combined cycle gas filling the residual according to REE. On a typical April 2024 weekday, between 11:00 and 17:00 CET, instantaneous renewable share crossed 80 percent of demand for sustained periods, and on several Sundays Iberia ran a fully renewable system for multiple hours. The 2024 generation mix is structurally cleaner than the EU average and decisively cleaner than 2018, when coal still supplied 14 percent.

The PNIEC 2023 update, the integrated national energy and climate plan that MITECO submitted to the European Commission in September 2023, sets 2030 targets of 76 GW solar PV, 62 GW wind onshore plus offshore, 22 GW battery storage, and 12 GW electrolyzers. Hitting those numbers requires roughly 8 GW per year of solar additions and 4 GW per year of wind additions through 2030, against a 2024 actual of 6.7 GW solar and 1.5 GW wind. Wind is the binding deficit, driven by permitting and community opposition in Galicia, Aragon, and Castilla y Leon.

Negative price hours, capture price collapse, and curtailment #

OMIE, the Iberian day ahead market operator, recorded 1,808 hours in 2024 in which the Spanish zonal price cleared at zero or below, against fewer than 100 hours in 2023 and effectively zero before 2023. The cluster is structural and predictable: spring midday hours when solar generation peaks against weak demand, and high wind events on weekends when industrial load is depressed. Bloomberg NEF Iberia coverage and Reuters Madrid both flagged 16 April 2024 as the first day on which the cleared average across all 24 hours dipped below EUR 5 per MWh.

The economic consequence has been a sharp compression in capture prices, the volume weighted price that variable generators actually receive. AleaSoft and BNEF estimate the 2024 solar capture price at roughly EUR 32 per MWh against an arithmetic baseload average near EUR 64, a capture rate of roughly 50 percent and a decline of about 35 percentage points from 2022. Wind held up better at roughly 75 percent capture, but onshore wind LCOEs in the 2020 to 2022 vintage now sit uncomfortably close to realized revenue, before considering merchant tail risk after PPA expiry.

Curtailment from system operator instructions reached roughly 3.4 percent of available variable renewable energy in 2024 according to REE balancing data, concentrated in Extremadura and southern Castilla La Mancha where transmission upgrades have lagged behind solar commissioning. The 2025 to 2030 transmission plan published by MITECO in late 2024 commits EUR 5.4 billion to bulk transmission upgrades plus EUR 1.7 billion to grid digitalization, but the planning horizon for new lines runs to roughly seven years, which means curtailment will worsen before it improves.

The Iberian green hydrogen pipeline and the EUR 5 billion bet #

Spain has positioned itself as the EU's intended green hydrogen hub, and the EUR 5 billion headline figure tracked across MITECO, Reuters, and IRENA reflects committed plus advanced stage capex on electrolyzer projects through 2030. The flagship is the Iberdrola Puertollano facility, a 100 MW PEM electrolyzer that came online in 2022 supplying Fertiberia ammonia, with a 2 GW expansion at Puertollano plus Palos under permitting review. Cepsa's San Roque project at 2 GW (Andalusian Green Hydrogen Valley) targets first electrolyzer modules in 2027 with anchor offtake from Cepsa's own refinery and Maersk for green methanol bunkering at Algeciras.

Enagas has been positioned as backbone operator of the Spanish hydrogen network and is the Spanish lead on the H2med corridor, sometimes referred to in early documentation as CC2H or the Celtic Atlantic to Central Hydrogen connection, a 2,500 km pipeline from Portugal through Spain to France and Germany targeted for 2030 operation. The European Commission designated H2med a Project of Common Interest in April 2024 with conditional CEF Energy support. Total system cost is in the range of EUR 2.5 billion, with the Barcelona to Marseille subsea spur (BarMar) accounting for roughly EUR 2.1 billion alone.

The economics are not yet closed. Realized levelized cost of green hydrogen at Spanish projects in 2024 sat in the EUR 5 to 7 per kg range against a target competitiveness threshold near EUR 2 to 3 per kg. The IRA in the United States offers a USD 3 per kg production tax credit that has redirected several Iberian and US developer balance sheets toward Texas and Louisiana. The EU response, the Hydrogen Bank pilot auction that closed in early 2024 with awards averaging EUR 0.48 per kg subsidy, is small relative to the scale required.

Almaraz, Asco, Vandellos, and the nuclear closure timeline #

Spain operates seven reactors across five sites with combined nameplate capacity of roughly 7.1 GW, supplying 20 percent of 2024 generation. Under the protocol signed in March 2019 between Enresa and the operating utilities (Iberdrola, Endesa, Naturgy, EDP), the closure schedule begins with Almaraz unit 1 in November 2027, Almaraz unit 2 in October 2028, and continues through Asco 1 in 2030, Cofrentes in 2030, Asco 2 in 2032, Vandellos II in 2035, and Trillo in 2035. The schedule is set in the General Radioactive Waste Plan and reaffirmed by MITECO in 2024.

The owners (Iberdrola 53 percent of Almaraz, Endesa 36 percent, Naturgy 11 percent) requested in late 2024 a renegotiation of the closure dates citing the Tasa Enresa back end levy and the special tax on nuclear generation, which together they argue make continued operation uneconomic well before the engineering end of life. The Sanchez government's position through April 2026 has been that the schedule stands, though Vice President and Ecological Transition Minister Teresa Ribera signalled openness to fiscal renegotiation if owners commit to continued operation under modified terms.

The system implication is sharp. Almaraz alone supplies roughly 7 percent of Spanish generation in a typical year, and the 2027 to 2028 closures coincide with the steepest projected ramp of solar and storage. REE's 2024 adequacy report assumes the closures and concludes that adequacy is preserved only if storage commissioning meets PNIEC trajectory and if the France interconnection expands. If either condition slips, system marginal cost in evening hours rises materially and the 2030 capacity market design becomes a binding rather than supporting policy lever.

The France interconnection: from 2.8 GW to 5 GW via Biscay Bay #

The Spain to France interconnection currently provides roughly 2.8 GW of net transfer capacity across four lines, the Catalonia eastern Pyrenees HVDC plus three older AC links through the Basque Country, Navarra, and the central Pyrenees. This represents barely 2.5 percent of Spanish peak demand, well below the European Council 2002 target of 10 percent and the 15 percent target reaffirmed by the European Commission in the 2030 framework. Iberia is the most under interconnected major grid in Europe.

The Biscay Bay subsea HVDC project, sometimes called the Golfo de Bizkaia or Gulf of Biscay link, is a 400 km subsea cable rated at 2 GW, jointly developed by REE and RTE with EUR 1.75 billion of capex split between the operators and a EUR 578 million CEF Energy grant from the European Commission. Construction is underway, with cable laying in 2026 and energization targeted for 2028, raising total Spain to France transfer capacity to roughly 5 GW.

The economic stakes are substantial. AleaSoft and BNEF Iberia analysis indicates that the persistent Iberia to France price spread, France typically EUR 15 to 35 per MWh higher in midday solar hours, is a near pure function of interconnection scarcity. Doubling transfer capacity does not eliminate the spread but compresses the worst negative price episodes and creates meaningful export revenue for Iberian generators, which OMIE staff modelling estimates at EUR 1.2 to 1.8 billion per year of additional Iberian generator revenue under 2024 generation patterns. The Portugal interconnection (MIBEL is already a single market), by contrast, is functionally adequate at roughly 4.2 GW following the 2024 reinforcement on the northern corridor.

PNIEC trajectory, the 2024 tariff reform, and the political envelope #

MITECO's May 2024 grid tariff reform, approved by the Council of Ministers on 28 May 2024, restructured network access charges for both transmission and distribution. The reform shifted a larger share of fixed costs onto capacity terms rather than energy terms, lowered industrial high voltage tariffs by roughly 14 percent on average, and introduced explicit price signals for behind the meter storage. Spanish industrial users now face among the most favourable network charges in Western Europe, by design, to retain industrial load and attract electrointensive investment including data centres, electric arc furnaces, and electrolyzers.

The tariff reform pairs with the still in design 2025 capacity market mechanism, which Ribera's team submitted to the European Commission for state aid clearance in October 2024. The proposed mechanism is a technology neutral capacity auction with a clearing horizon of three to seven years, dispatchable thermal plants, batteries, demand response, and pumped hydro all eligible. The Commission's preliminary view in early 2025 raised concerns about double remuneration with the existing capacity payment scheme, and final approval is expected in mid 2026.

The political envelope is the Sanchez minority government, which depends on Sumar plus regional parties (ERC, EH Bildu, BNG) for budget passage. The 2025 budget passed in March 2025 only after concessions on autonomous community financing, and the 2026 budget remains unresolved as of April 2026. Energy policy is bipartisan in direction (PP supports the renewables target and interconnection expansion) but contested on instrumentation (PP opposes the windfall levy and favours faster nuclear life extension). Strategos platform analysis treats the most likely 2026 to 2028 outcome as continuity on PNIEC headline targets, slippage on wind additions, partial nuclear life extension on Almaraz, and capacity market clearance in late 2026, with Biscay Bay energizing on schedule. Promethean sensitivity scenarios show that a 12 month Biscay Bay delay combined with a 24 month nuclear extension is the cleanest outcome for Iberian generator revenue, but carries the lowest probability mass under current government composition.

Sources #

• REE Red Electrica de Espana, Avance del informe del sistema electrico 2024
• MITECO Ministerio para la Transicion Ecologica, PNIEC 2023 to 2030 actualizacion September 2023
• OMIE Iberian day ahead market data, Spanish zone 2024 results
• European Commission, H2med Project of Common Interest designation, sixth PCI list April 2024
• IEA Spain 2025 Energy Policy Review
• IRENA Renewable Capacity Statistics 2025, country profile Spain
• REE and RTE, Golfo de Bizkaia (Biscay Bay) interconnection project documentation
• Reuters Madrid coverage of Almaraz closure renegotiation, December 2024 and February 2025 wires
• Bloomberg NEF Iberia power market outlook 2024 to 2030
• UNEF Union Espanola Fotovoltaica, Anuario 2024 self consumption registry
• AEE Asociacion Empresarial Eolica, Eolica 2025 sector annual review
• Enagas H2med and Spanish hydrogen backbone investor presentation 2024